Regulatory authorities frequently take strong action; online lending interest rates are not allowed to be "concealed or hidden."

Ask AI · How do new regulations make online lending costs transparent?

Our reporter Zhang Yan

“When I borrowed, the annualized interest rate was clearly stated to be less than 24%, but when I repaid, I found that various fees almost doubled.” Similar complaints are common on major complaint platforms.

The long-standing phenomenon of disguised high interest rates in the personal loan market is now being strongly rectified by regulators.

On March 15, the State Financial Supervision and Administration Bureau and the People’s Bank of China jointly issued the “Regulations on Clear Disclosure of the Total Cost of Personal Loan Business” (hereinafter referred to as the “Regulations”). Just two days earlier, the State Financial Supervision and Administration Bureau held centralized regulatory talks with five internet loan facilitation platforms.

From the talks to the new regulations, regulators have repeatedly “struck,” directly targeting industry stubborn problems such as opaque interest and fee disclosures, misleading marketing, and illegal collection practices. For a long time, some online lending platforms used complex fee categories and information asymmetry to “hide” the true interest rate, causing consumers to unknowingly bear costs far exceeding expectations. Now, this “cover-up” is being torn away layer by layer.

Regulatory “Warnings” and Name-Calling, Multiple Platforms Named

On March 13, the State Financial Supervision and Administration Bureau held regulatory talks with the operating entities of five internet loan facilitation platforms. The platforms involved are Fenqile, Qifu Borrow, Niwo Dai Loan, Yixianghua, and Credit Fei. These platforms are all highly active in the market, including some leading institutions.

The regulatory talks required these platform operators to promptly correct issues identified. The main rectification points involved four aspects: standardizing marketing and promotional behaviors, clearly disclosing loan product interest and fee information, strictly complying with personal information protection regulations, and conducting lawful and compliant collection activities while improving customer complaint resolution mechanisms.

In fact, this is not the first time this year that regulators have “warned” platforms about interest and fee disclosures. In January, the National Financial Regulatory Bureau held talks with six travel platforms—Ctrip, Amap, Tongcheng Travel, Fliggy, Hanglv Zongheng, and Qunar—requiring them to standardize marketing and clearly disclose loan interest and fee information when engaging in financial-related services.

Behind these “warnings,” long-standing chaos in the internet loan facilitation industry persists.

Our investigation found that in terms of interest and fee disclosures, some platforms suffer from “interest rate illusion.” In marketing, platforms often attract users with gimmicks like “daily interest as low as a few ten-thousandths,” “a thousand-yuan loan for only a few cents,” deliberately downplaying or hiding the annualized interest rate. Borrowers only realize at repayment that, besides interest, there are numerous “service fees,” “membership fees,” “credit enhancement fees,” etc., and the actual total financing cost is far higher than the loan rate explicitly stated in the contract. These fees are often marked in small print within lengthy electronic contracts or scattered across different confirmation pages, making it difficult for borrowers to notice.

Many consumers report that after providing personal information to view their loan limits, they frequently receive third-party marketing calls or even suspected scam messages. In today’s data-as-asset environment, loan facilitation platforms have many gray areas in collecting, using, and transmitting user information, even forming “data black markets.”

Additionally, illegal collection practices such as aggressive collection, “exploding” contact lists, and verbal threats have long been stubborn problems in the loan facilitation industry. Some platforms outsource collection to third-party agencies and lack effective control over their behavior, leading to frequent violations.

Regulators continue to tighten controls. From the issuance of the “Notice on Strengthening the Management of Commercial Bank Internet Loan Facilitation Business and Improving Financial Service Quality” early 2025, to the release of the “Guidelines for Collection of Personal Consumer Loans by Financial Institutions (Trial),” and now the implementation of the “Regulations,” a series of regulatory documents have been issued intensively, demonstrating a firm resolve to rectify personal loan chaos.

Implementation of New Regulations: Making Every Fee “Sunlight”

How to fundamentally eliminate opaque interest and fee disclosures?

The “Regulations” clearly require financial institutions to itemize and explicitly disclose all components of the total financing cost to borrowers, and to produce a “Personal Loan Business Total Cost Disclosure Form.”

What is the “total financing cost” of personal loan business?

The “Regulations” specify that the total financing cost refers to the actual financing costs borne by the borrower in personal loan transactions, including loan interest, installment fees, credit enhancement service fees, and other normal performance costs, as well as potential costs such as overdue penalty interest and misuse penalties in case of default. This means that service fees, guarantee fees, membership fees, and other costs hidden behind interest in the past will be listed one by one.

With the increasing popularity of internet loans, online channels have become the main battlefield for personal loan business. The “Regulations” specify that for online personal loans, financial institutions should display the “Personal Loan Business Total Cost Disclosure Form” via pop-up windows, with mandatory reading times, and require borrowers to confirm.

In recent years, online consumer installment models have rapidly emerged, but many installment products only display the monthly repayment amount before signing, without mentioning service fees, guarantee fees, and other charges, enticing consumers with seemingly low repayment pressure, which often results in actual installment costs exceeding the 24% red line.

To address this, the “Regulations” require that for online installment scenarios, the payment page must prominently and clearly display the loan principal, installment schedule, service fees, fee payers, the annualized total financing cost under normal performance, and potential costs and standards in case of default. It should also clearly remind that no other interest or fees will be charged beyond those explicitly disclosed.

Merely implementing the disclosure of total financing costs by lending institutions is not enough. The “Regulations” specify that in cooperation agreements with partner institutions, lenders must clarify responsibilities and obligations regarding the implementation of total cost disclosures. Lenders should strengthen management of partner institutions, promptly correct violations, and, in serious cases, take measures such as terminating cooperation, legally pursuing damages, and pursuing legal responsibility.

These partner institutions include third-party agencies involved in marketing, customer acquisition, guarantees, and credit enhancement that cooperate with lenders in personal loan business. In the personal loan chain, various loan facilitation platforms are important channels for lenders to acquire customers and are also hotspots for complaints about high interest rates and opaque total costs.

Dong Ximiao, Chief Economist of Zhaolian and Deputy Director of the Shanghai Financial and Development Laboratory, stated that the focus of the total cost disclosure should be on internet loans, including personal loans launched through cooperation between financial institutions and loan facilitation platforms, as well as personal loan products offered by internet platforms. By including partner institutions in the regulatory scope and extending disclosure requirements across the entire personal loan chain, the goal is to ensure every fee withstands “sunlight” scrutiny.